The IRS is turning up the heat on employers via its exam program. The agency is in the middle of a special series of random payroll tax examinations, auditing about 2,200 firms a year. Agents are directed in all audits to look for worker misclassification.
The Service is also mining Form 8919 filings for audit prospects. Taxpayers who believe they were incorrectly treated as contractors file this form with the IRS and give information about their employers. The Internal Revenue Service screens the filings and sends the best cases out to the field for examination. In addition, the IRS is looking at businesses that have several 1099’s over $10,000. If a company has several 1099’s, it might indicate that they are using independent contractors.
